Major Renovation, New Properties Hitting Downtown Hotel Market

Houston's hotel market is heating up, and with that, developers are adding more properties while existing hotels get a makeover.

Owners of the Lancaster Houston Hotel, the 93-room boutique property at the corner of Louisiana and Texas streets, announced this week that work will begin in April on a $10 million renovation of the historic property.

The family-owned Lancaster is getting an extensive redesign that will include the hotel's lobby and meeting spaces, as well as all guest rooms and suites. The project will also include upgrades to the property's technology and mechanical systems.

The Lancaster opened as the Auditorium Hotel in 1926 and reopened as the Lancaster in 1983. The hotel will remain open during renovation as work proceeds one wing of the hotel at a time. Completion is targeted for mid-summer 2013.

According to a release, the Lancaster's new interior design will echo classic American styling with a bow to the hotel's Theater District location. The décor will use men's suiting fabrics mixed with a rich palette of luxurious accents and furnishings, including premier bedding and bathroom fixtures and fittings by WaterWorks.

A few blocks south of the Lancaster, the historic Humble Oil Building complex on Main Street and Dallas, is getting a new 166-room SpringHill Suites hotel. The complex is already home to a 191 Courtyard and 171-room Residence Inn. The property's Maryland-based owner, RLJ Lodging Trust, is converting the third structure that currently houses apartments into the hotel.

Construction on that project is slated for completion in mid-2015. The new hotel will likely benefit from its close proximity to the George R. Brown Convention Center, just six blocks away.

All of this comes at a time when Houston's hotel market is experiencing a significant upswing. According to data from Smith Travel Research, occupancy at Houston hotels showed the largest increase of the nation's top 25 hotel markets in the fourth quarter of 2012, up 6.9% from fourth quarter 2011. What's more, Houston's average revenue per available room, a key metric in the hotel industry, increased 12.6% to $58.65 in the fourth quarter, the fifth highest increase in the U.S.

In December, RIDA Development Corp. and Houston First announced plans for a new 1,000-room Marriott Marquis that will rise adjacent to the GRB Convention Center. The massive hotel will join the Hilton Americas Houston as the city's second convention center hotel, dramatically increasing Houston's ability to host major conventions. Construction on that property is scheduled to begin in 2014 with completion in spring 2016.